Shares in Standard Chartered (LON:STAN) have fallen into the red as the Asia-focused lender announced that it was spinning out its private equity business and selling the bulk of its PE investment portfolio. The group expects to incur a restructuring charge of around $160 million as a result of the move.
As of 10:32 GMT, Standard Chartered’s share price had given up 1.55 percent to 595.30p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.09 percent lower at 6,839.10 points. The group’s shares have lost more than 21 percent of their value over the past year as compared with about a an 8.9-percent dip in the Footsie.
StanChart spins out PE business
Standard Chartered announced in a statement today that it had agreed terms for the spin out of its private equity business and a sale of the majority of its private equity investment portfolio to funds managed by ICG Strategic Equity, part of Intermediate Capital Group.
“The SCPE team has streamlined the Group’s private equity business over the past few years, in line with our stated objectives,” Simon Cooper, CEO, Corporate, Commercial & Institutional Banking at the Group, commented in the statement, adding that the transaction would see the Asia-focused lender “exit the majority of its private equity exposure”.
The company noted that the terms of the agreement are confidential and that the transaction was expected to complete in the first half of next year. StanChart, however, noted that the move was expected to incur a restructuring charge of around $160 million.
Analysts on Asia-focused lender
Credit Suisse reiterated its ‘underperform’ rating on StanChart last week, without specifying a price target on the shares. According to MarketBeat, the Asia-focused lender currently has a consensus ‘hold’ rating and an average price target of 730.31p.
As of 10:34 GMT, Monday, 17 December, Standard Chartered PLC share price is 593.20p.